Insights

Global Automotive Supplier Study 2018

Dec 13 2017

Global automotive supplier revenues continue at record levels in 2017, but industry disruption is gathering pace and threatening business models

While the global automotive supplier industry continued to grow in 2017, disruption caused by four megatrends – Shared Mobility, Autonomous Driving, Digitalization and Electrification – has gathered pace. This disruption has industry players reevaluating their business models, according to the "Global Automotive Supplier Study 2018" from consultancy Roland Berger and Lazard.

The study analyzed performance indicators of approximately 650 suppliers around the globe to assess the current state of the industry, as well as trends and challenges.

Recent developments point toward an acceleration of the disruption caused by four megatrends:

1. New mobility business models (such as ride hailing and car sharing), are poised to disrupt car ownership, personal mobility and goods logistics; 2. The timeline for fully autonomous driving keeps accelerating as necessary economics, regulations and technology fall into place3. In digitalization, artificial intelligence offers almost limitless possibilities, while connectivity-enabled technologies are reaching mainstream application4. Momentum for electrification is building among regulators and OEMs, and progress on technology is accelerating

Based on these trends, the automotive “end game" appears inevitable, but the transition period continues to be marked by a high level of uncertainty. Automotive suppliers will need to prepare for five distinct changes that are emerging: slowing growth; accelerated technological change; software as a key differentiator; commoditization of hardware; and pressure on valuations for commoditized suppliers.

Survey Highlights:

The industry achieved record volume in 2017, but global growth is slowing and declined in North America.

Vehicle production volumes may decline as forms of ride-sharing and autonomous driving continue to evolve.

New mobility services are expected to account for more than 10% of new car sales by 2025.